Valve Say No Projects Canned, Refuse To Discuss Layoffs

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Gabe Newell has told Engadget that, despite the speculation (including our own) that a hardware project may have been cancelled, that Valve haven’t cancelled any ongoing projects at all, and that’s the the reason behind their having let some staff go. He added, “We’re not going to discuss why anyone in particular is or isn’t working here.”

RPS is pretty certain that Valve has let around 10% of its employees go in the last day or so, around 25 to 30 staff, but Valve has refused to discuss this. Reports from Gamasutra seem to suggest that even the hugely respected director of business development, and a very key figure behind Steam, Jason Holtman is one of their number. RPS is trying to confirm this.

Newell’s brief statement to Engadget reads,

“We don’t usually talk about personnel matters for a number of reasons. There seems to be an unusual amount of speculation about some recent changes here, so I thought I’d take the unusual step of addressing them. No, we aren’t canceling any projects. No, we aren’t changing any priorities or projects we’ve been discussing. No, this isn’t about Steam or Linux or hardware or [insert game name here]. We’re not going to discuss why anyone in particular is or isn’t working here.”

It’s worth noting that Valve hasn’t responded to emailed enquiries from RPS (although that’s certainly nothing new for us), nor to many other gaming sites who approached them for comment, instead picking a respected gadget website to give their sole quote. There certainly haven’t been any public statements expressing regret at losing any staff, nor thanking anyone for their work for the company until this point.

As much as it’s unpleasant to see people out of a job, is Valve in any way obliged to explain themselves? They’re a private company, and therefore don’t have to explain away their company dealings with anybody.

This happens in industry all over the world on a daily basis, yet for some reason, the games industry seems to think they’re owed an explanation whenever this happens.

It mostly have to do with the nature of the industry: the same game project can vastly change between two different developers, because the personal involvement is much more important in this sector than in others.

It’s a little like music, whenever someone leave a band, it’s an important information.

…

Regarding the fact they “don’t have to explain away their company dealings”, technically yes, but again video games companies, especially Valve, are a little bit more than just factories making the same product over and over. That’s also why 25 people leaving Valve is more important than 25 people leaving Zynga.

Absolutely, Valve can hire and fire anyone they want to. I think the reason for all the speculation isn’t so much about the actual firing though it’s about the reason behind the firing.

I don’t think the people speculating are so much concerned about the people out of a job, sad as it is to see them out of work, or even whether it was fair to let them go but more about what this means for Valve and any of the projects we are aware of.

Has “Piston”/Steambox been cancelled? Is Episode 3 canned? Is there some other project we might have been unaware of that’s gone? Or has Gabe simply gone on a spending spree and needs to make some cutbacks?

I think it’s more about curiosity or concern about what’s going on behind the scenes at Valve, but as with their hiring and firing they aren’t obliged to tell anyone about what’s going on, unfortunately for us curious gamers.

Exactly – the people who have been fired are probably starting the epic task of job hunting, the very last thing they need is any public statements about them by their former employers. I’m sure they will all be receiving glowing references.

Whatever you think about valve, and I fall firmly in the “Not as good as they want you to think” camp, for them to come out and explain why they did fire/make those people redundant/accept their resignations etc etc would be deeply unprofessional. Valve have no investors to answer to and I hardly believe their business will be negitively impacted on if they don’t explain themselves to consumers, so whatever! It’s just business – it may not be fair, we may not like it, but it’s life.

I’d say “not as good as everyone thinks” would be a better description. The Steam client is a mess (heavy-weight, quirky interface, etc.), its community features severely lacking, its consumer support pretty average… Really, what is it that they do besides charging people and delivering games? If it weren’t for recent stuff like Greenlight and this “PC in living room” bet, you’d think Valve is on the autopilot. The only thing that keeps Valve from being overtaken by an upstart willing to do stuff better is the fact that people have their entire game library on steam (“everyone uses steam”). Which is just sad, to be honest. “Do I own my games?”, and all that. No, you don’t. Steam counts on it to keep you as a client, despite being crap.

It may be crap, but it is better than every other client being used by every other digital distributor. Their store is better laid out and more usable and attractive than any other store, while still being a massive PITA to browse. And they know how to do sales, which nobody else seems to. Most other distributors don’t even offer community or multiplayer functionality, and Steam is doing both of those things better than Origin, GFWL, or Gamespy, which have been their main competition on the multiplayer front.

Which is to say, they may suck as a store and a client, but they are nonetheless the best we’ve got.

I think everyone knows they’re not obliged, but the problem is that VALVe is a company that’s on a VERY high pedestal for a lot of people. They seem to be doing fantastic business (in terms of proftability and profitability per employee); they’re much admired by a great deal of people and they’re considered “the good guys”.

The notion that a company making good money that has literally begged employees to stay in the past (remember the chap who was sick and was going to quit so Gabe told him ‘your job at valve is to go home and get well’ or whatever – please tell me this story is true so I’m not making a prick of myself) has laid people off makes people wonder why. They don’t owe us an explanation, but we’d sure like to know anyway, because this company is important to the PC gaming community.

Usually when someone puts something in air-quotes, they’re saying other people consider them to be said thing, as in this case of “the good guys.” You completely missed his point. An apparently large number of people seem to like Valve a lot, thus holding them to a higher standard, thus expecting more information.

If you could take anything away from the comment, it’s that the person you were responding to DOES NOT hold Valve on a pedestal.

Personally, I think people expect explanations from game companies because they’re bored, which makes people nosy, thus justifying the existence of game journalism in the first place, but I can see how others would find that to be rather crass and cynical.

Quotations can be used for a variety of purposes. You’re presuming these are so-called “scare quotes”, which are used to hold a phrase or concept at arm’s length, distancing it from the speaker. But look, up there I used them to simply encapsulate a stock phrase, which is a different purpose and also just as plausible in this context.

And that usually requires more than emailed inquiries. I really think games journalism, on the whole, is a bit of a misnomer. Most gaming news sites are generally “here’s some news releases, PR pieces, reviews and our opinions on what other people have said.” Rarely do you get in-depth or behind-the-scenes coverage as a street-beat reporter would.

Don’t think it’s the industry in general, but valve in particular – they essentially own my entire games collection for pc. If they go bust, i stand to loose hundreds of pounds. Hence the interest, and why i get a bit twitchy whenever they just randomly fire / lay-off / redundicise / skull f*ck 10% of the company.

You can scale back funding to a project without cutting it entirely. It might mean that whatever they were working on (Jeri Ellsworth suggests something in the wearable computing projects with her experience of microcontrollers) has been scaled back so they can focus on other things, but the employees who used to work on those projects don’t have skills which carry across to other projects

Internal differences does seem like the most plausible reason.
Muahaha! Gaben has himself turned in to the monster that he was initially fighting!
Seriously though, if smart people have come to such a conclusion, that it will turn out better for us gamers in the end. And Valve is full of smart people.

It is indeed an incredibly shitty piece of software, but above it’s mentioned a lot of non-Steam people got sacked too – it could be a series of individual issues.

Re: John saying they haven’t publicly expressed regrets – what? You say that to the individual getting the sack. If you spill a drink on someone, you just tell them you’re sorry; you don’t then turn around and address the whole room: “HEY, I JUST SPILLED A DRINK ON THIS GIRL AND I APOLOGISED TO HER. SHE SEEMED TO ACCEPT IT BUT WAS A TRIFLE MIFFED. IT’S AIGHT, WE COOL.”

I wish RPS would take a minute from its war on porn in games to make a post about how much better the Steam client could be with features x, y and z. Maybe if enough people say this, we can convince Valve to invest 1% of their income back in its cash cow.

Maybe you should make a better DD platform then Skittle? I mean clearly Valve must be employing incompetents based on you critical assessment of the state of the application. It should surely be a doddle for you to whip up a better mousetrap in no time.

Kadayi, I knew it was only a matter of time before someone trotted out the stale “do it yourself” counterargument. Tell you what: give me enough applicable training and I guarantee you I could make a better game client than what Steam is right now.

Or, instead of contributing to my professional education for a future in programming, you could just shut up.

A company might let a couple people go for that reason, but 25? Unless they suddenly changed some metric by which they evaluated performance and found a lot of people lacking, it doesn’t seem to explain it. (And given how the company is structured, I can’t see them having a metric like that, much less changing it.) It seems like some sort of restructuring is going on, Valve-style.

I figure they left to start their own company as well. The skillets seams a bit diverse, and with Valve being a private company and pulling so much cash being a middle man(that’s essentially their new business model like Apple, Ebay, Banks, etc. That’s why they make so much money with so few employees) it’s unlikely they would or would need to let go 10% of such a small and profitable company. They probably just wanted to work on more than 2 more games before they die of old age.

Except that at least some of these people didn’t go willingly. Gamasutra is reporting “phrases we’ve heard from affected employees describing the incident include ‘great cleansing’ and ‘large decisions.'”

I feel he is protecting not only valve but those that have been let go by keeping quite. I find it a bit odd there is such a huge frenzy and so much speculation over this it really seems very unhealthy. Pestering gabe about it is a bit extreme. In the real world these sort of things happen in every company for a variety of reasons.

Actually this is one of the rare situations where it’s theoretically possible that some money could make it back to at least one developer. (This is a step up from most re-releases, where the original dev studios no longer exist or have any of the same staff and therefore it’s only the publisher that can possibly be making money.) The game was co-developed with Irrational games and Ken Levine for one is still at Irrational, so he, at least, has a small, theoretical chance of seeing some money out of a re-release. Except that the nature of publishing contracts and the poor initial sales indicate that EA are likely the only ones getting any money out of this, as per usual.
The reality is that the money the developers get from a game tends to come up-front from the publisher, in order to develop the game in the first place, and they’re unlikely to see any money from sales unless the game does extremely well within a short time of release. And not always then, either.

In a world where I can get a copy of only-months-old Far Cry 3 or Borderlands 2 for $15, asking us to pay a tenner for a fourteen year old game — classic or otherwise — is a bit ridiculous. That holds true especially when you question where the profits are going or how technically competent the game is in its current state.

It is big news because it is TWENTY FIVE PEOPLE. That is too big a number to be explained away by business as usual employee turnover. I don’t believe that all these 25 suddenly “just didn’t fit it” with Valve’s culture. There doesn’t seem to be a financial imperative either because Valve by all accounts is very profitable. It could be the closure of a new project but Gabe Newell has denied that (although he what he said hasn’t ruled out outsourcing). What else could it be? I don’ t know but it is certainly interesting to speculate.

When reached for comment, Gabe Newell would nether confirm nor *deny* allegations that the former staff were let go for their involvement in a human trafficking ring. More on this as it develops or doesn’t.

I love the fact that nobody has considered that these 25 people just weren’t needed. Even if your company is doing amazingly, if you’ve got 25 people around doing fuck all you aren’t going to keep them just because you’ve got pots of money.

I am horrified that these 25 individuals have been involved in human trafficing and that Valve has been profiting from these illegal activities. Where are the prosecutions, they must be bribing the police as well.

If you run a successful company and you suddenly find yourself in a position where 25 people who were needed are no longer needed then you fire your managers. A company should always be working on the next project which is going to ensure their success and if those 25 staff members are the ones responsible for your current success you hang onto them because they’ve proven themselves.

Sure you’ll save money in the short term but when you ramp up production again recruitment and training is just going to drain your coffers again and there are no guarantees that the new staff will ever be as good as your old staff or that they will fit into your company culture.

Gamasutra’s list of supposed fire-ees suggests it’s mostly animation people leaving – maybe they’re just scaling back work on Source Filmmaker, now that it’s released and all? These are people who’ve worked on some very big projects before Valve and are probably on similarly sizeable salaries, no sense in keeping them on if they’re not needed anymore.

Also, to put in context the aforementioned (in the previous article comments) Valve’s Employee Handbook that was for quite some time irrationally observed as a statement to the company coolness:

There is, of course an hierarchy in the company. These firings are a statement to that. Someone’s got to have have managerial tasks in the company or it wouldn’t be possible to make supervising decisions, let alone enforce them as was the case here.

Other than the act of firing, the fact employees are actually forbidden to speak about them is a clear indication of an hierarchical structure. Naturally I expect that this structure to only be minimally enforced and the company to do its best to take it away from daily work and daily decisions. But for anyone who took that handbook all too seriously, I can only offer to say: The Cake is a Lie.

I doubt anyone thought that there was literally no hierarchy whatsoever, just that they kept it as flat as possible. eg, Gabe at the top, then project leaders then developers, with an HR team off to one side who manages staff decisions (hiring, firing, holiday time) but doesn’t have control over the direction of the company’s projects

Indeed. I thought the ‘Handbook’ was a rather regretable act of hubris in truth. Valves success over the last few years has really come down more to the inexorable rise of Steam as the PC DD distributor of choice more than as a result of their actual design product, which albeit sell well don’t quite have the sales reach of other development studios. Perhaps this curtailing of staff might be indicative of a more focussed effort on game development as they move forward.

“We’re not going to discuss why anyone in particular is or isn’t working here.”

Well fair enough. It’s your company. However, even though nobody seems to know the reasons for layoffs, I wonder why Valve isn’t actually hiring more as opposed to letting people go. It’s not like the company is in trouble, they have a money printing machine, and have, as far as I can see, very little expenses, since Valve indeed is a pretty small company considering how influential the company is. Around 300 people minus the layoffs. Not exactly a huge company all things considered. Comparing that to EA or Activision.

Letting people go translates to me, less stuff is being done. And I wish Valve would put their huge amounts of Steam-money into more projects that benefit more people. Afterall Valve’s success is based on consumer loyalty and community support in all manner of directions. Giving back is what I wished for.

Don’t get me wrong, Dota 2 was basically a gift that a many people wished for, for a very long time. And it is very much appreciated. Many people were wishing for a AAA faithful Dota remake with exactly the features Dota 2 provides. It made a lot of people happy. Without wanting to sound ungrateful, and with taking into account that we don’t know what Valve is doing behind the scenes, I wished there would be just more Valve stuff to get excited over. And that translates, at least to me, to hiring more talented people as opposed to letting talented people go.

There is so much opportunity to be had for a gifted game developer such as Valve, just pointing into one direction here: The PC gaming space needs a new arena shooter, desperately. A very good one. A killer app. Something only Valve can provide as far as I can see it. Something that is as well crafted as Dota 2. Hint: Quake is doing nothing right now other then rotting in the cupboards somewhere deep in iD cellars. Hint hint.

And how does that conflict with the statement that I made that Valve is a smaller company and thus has less expenses obviously like a company as big as Activision or EA. I frankly can’t follow your thought process.

Every organization has to do a top-down audit of its employees now and then. The fact that Valve is so profitable is no reason to keep employees on the payroll whose positions are no longer needed – they are, after all, a business.

Quite a few of those positions it would seem have run their course.

It’s unfortunate for the people involved, of course – but I’m sure a lengthy stint at Valve with a good recommendation from them can carry a ton of weight in the job market. At least Valve waited until after the holidays, unlike so many of those other heartless devs that dumped employees last year just before Christmas.

He talked a bit about not getting rid of dead wood quick enough at his talk at the university of texas which I thought was an odd thing to say at the time.link to polygon.com

I’m surprised no one talked about it at the time.

**It is, as you might imagine, a process that’s not devoid of problems. One of the most notable, Newell said, was how to introduce new human resources into the process, and recognizing when that process just wasn’t working out.

“You have to be really aggressive about firing people,” Newell said. “We haven’t done a really good job with interns or new hires. That’s kind of a sink or swim thing. People have to take it seriously, right? It’s an engineering problem in the sense of, you have to make decisions, measure outcomes, and make changes as a result of it. I would have trouble working any other way now, I think most people at Valve would have trouble.

“There’s something we somewhat unkindly call the beaten wife syndrome, where people come in from other industries and really struggle. The worst are people from the feature film industry, where they’ve been taught that any time they show initiative, that somebody’s going to leap out and smite them for doing that. It usually takes about six to nine months for people to really sort of internalize the working model of the company.”**

I believe that there is the key. It’s sad to say for those people, but it seems like Gabe probably decided to do some house cleaning and get rid of some of the people who weren’t contributing at the level Valve expects.

That fully explains why Valve is being so tight-lipped about the reasons: to avoid trashing the resputations of the people being let go if they say something negative (which could get them sued). If it was budgetary or project-related cutting, they likely would be more open about it , express thanks and best wishes, etc.

Jokes and conspiracy theories aside, if Tom Leonard’s gone that’s pretty disappointing. With Doug Church having joined Valve a couple of years ago, Valve now had two important figures from Looking Glass Studios. Tom Leonard was both the AI programmer and lead programmer on the original Thief games and an engine programmer for the Dark engine, which was also used for System Shock 2.

They aren’t canceling any projects. They aren’t changing any priorities or projects they’ve been discussing. This isn’t about Steam or Linux or hardware or [insert game name here].

In other words, everything that were being worked on are still being worked on, and we know they are hugely profitable. So what’s left?

They simply didn’t want those people working there anymore.

Those who have been following Valve’s employee policy/corporate non-structure and whatever Gabe has been saying about it, knows that hiring excellent people AND firing sub-par people is essential to their process. They are cleaning house of whatever wasn’t working as well as they should [anymore].

I find a bit baffling that some people hearing this news entered in a mindset like “We demand a public explanation”.

Why? What are they supposed to say?
“We get rid of people that just wasn’t useful/productive enough”?
Let’s say that’s the reason, would you actually appreciate their lack of discretion and politeness in shaming publicly those ex employees?
Would you commend them for stating it openly?

Let me be clear, I’m not claim these people deserved it or anything like that (How could I? I honestly have no clue). I’m saying that it’s crazy to expect a public explanation about this from the company.